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In: Accounting
Compute and Interpret Altman's Z-scores Following is selected financial information for eBay Inc., for its fiscal years 2016 and 2015. (In millions, except per share data) 2016 2015 Current assets $ 8,875 $ 7,904 Current liabilities 3,847 2,263 Total assets 23,847 17,755 Total liabilities 13,308 11,179 Shares outstanding 530 741 Retained earnings 14,959 7,713 Stock price per share 29.69 27.48 Sales 8,979 8,592 Earnings before interest and taxes 2,325 2,197 Compute and interpret Altman Z-scores for the company for both years. (Do not round until your final answer; then round your answers to two decimal places.) 2016 z-score = Answer 2015 z-score = Answer Which of the following best describes the company's likelihood to go bankrupt given the z-score in 2015 compared to 2016. The z-score in 2016 decreased slightly. Z-scores for both years are in the gray area indicating some risk of bankruptcy. The z-score in 2016 increased slightly, which suggests the company's risk of bankruptcy has increased. The z-score in 2016 increased slightly. Z-scores for both years are in the gray area indicating some risk for bankruptcy The z-score in 2016 decreased slightly, which suggests the company's risk of bankruptcy has decreased.
In: Finance
John Hanning owns a small hotel. The following balances were taken from his books on 31 December 2016
Takings (Sales)
Premises, at Cost
Fixtures and Fittings at cost
Minibus
Provision for depreciation, 1 January 2016: Fixtures and
fittings
Minibus
Stock of wine, 1 January 2016 Debtors
Creditors
Bank overdraft
Cash in hand
Wages
Cleaning
Purchase of food and wine Running expenses of minibus Bank interest
(Dr Balance) Advertising
General expenses
Capital
Drawings
$
283,670.00 396,000.00 100,000.00
10,000.00
45,600.00 3,600.00 1,200.00 6,500.00 3,970.00
16,450.00 700.00 61,020.00 27,830.00 121,700.00 4,800.00 1,520.00 5,880.00 13,140.00 427,000.00 30,000.00
Page 2 of 6
Additional information:
Depreciation policies:
The fixtures and fittings should be depreciated at 15% on cost. The minibus should be depreciated at 20% of the written down value.
$3,000 of the total for the purchase of food and wine was in respect of food used by Larsen and his family.
Stock of wine at 31 December 2016 was $1,340.
Bank interest of $280 had accrued at 31 December 2016.
Advertising, costing $900, had been paid in December 2016. This was for advertising leaflets to be published in 2017.
Bad debts, $1,190, were to be written off.
REQUIRED
(a) Prepare the Income Statement for the year ended 31 December 2016.
[20 Marks]
(b) Prepare the Statement of Financial Position as at 31 December 2016.
[20 Marks]
In: Accounting
ALF’s Pet Supply Manufacturing produces a variety of pet products. ALF’s accounting records for 2016 contain the following information:
|
Budgeted |
Actual |
|
|
Manufacturing overhead costs |
$250,000 |
$220,000 |
|
Direct labor hours |
20,000 |
22,000 |
|
Direct material costs |
$500,000 |
$520,000 |
Two of the products that ALF’s produces are food bowls and chew toys. At the start of 2016, food bowl manufacturing was expected to use 5,000 direct labor hours and chew toy manufacturing was expected to use 10,000 direct labor hours during the year. Actual usage during 2016 was 4,000 direct labor hours for food bowl manufacturing and 12,000 direct labor hours for chew toy manufacturing.
ALF’s uses normal costing and allocates overhead costs using direct labor hours.
a. The 2016 predetermined overhead allocation rate is:
b. The amount of manufacturing overhead costs allocated to food bowl production during 2016 is:
c. The amount of manufacturing overhead costs allocated to chew toy production during 2016 is:
d. Manufacturing overhead costs during 2016 have been:
CHOOSE ONE: OVERAPPLIED UNDERAPPLIED NEITHER
e. If ALF’s instead allocated overhead costs using direct material costs rather than direct labor hours, the total amount of manufacturing overhead costs allocated during 2016 would have been:
CHOOSE ONE: HIGHER LOWER THE SAME NOT ENOUGH INFORMATION
In: Accounting
In late September 2016, the US Treasury issued three T-Bills, and they had issued a one-year T-Bill on September 15, 2016:
|
4-Week |
13-Week |
26-Week |
52-Week |
|
|
Issue Date |
9/29/2016 |
9/29/2016 |
9/29/2016 |
9/15/2016 |
|
Maturity Date |
10/27/2016 |
12/29/2016 |
3/30/2017 |
9/14/2017 |
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Face Value per $100 |
100 |
100 |
100 |
100 |
|
Price per $100 |
99.987556 |
99.936806 |
99.787667 |
99.363000 |
a) What is the Bank Discount Rate (rounded to 4 decimals) for the 52-week security?
b) Using the DISC formula, do you get the same answer as the Bank Discount Rate?
c) What is the Bond Equivalent Yield for the 26-week security?
d) Using the YieldDisc function, do you get the same answer as the Bond Equivalent Yield?
Thank you in advance
In: Accounting
Neilson Tool Corporation's December 31 year-end financial statements contained the following errors:
.........................................December 31, 2016 ...............December 31, 2017
Ending Inventory ..........$9,600 overstated ..................$8,100 understated
Depreciation Expense ..$2,300 overstated ............................-
An insurance premium of $66,000 covering the years 2016, 2017,
and 2018 was prepaid in 2016, with the entire amount charged to
expense that year. In addition, on December 31, 2017, fully
depreciated machinery was sold for $15,000 cash, but the entry was
not recorded until 2018. There were no other errors during 2016 or
2017, and no corrections have been made for any of the errors.
Neilson follows ASPE.
Instructions
Answer the following, ignoring income tax considerations.
(a) Calculate the total effect of the errors on 2017 net
income.
(b) Calculate the total effect of the errors on the amount of
Neilson's working capital at December 31, 2017.
(c) Calculate the total effect of the errors on the balance of
Neilson's retained earnings at December 31, 2017.
(d) Assume that the company has retained earnings on January 1,
2016 and 2017 of $1,250,000 and $1,607,000, respectively; net
income for 2016 and 2017 of $422,000 and $375,000, respectively;
and cash dividends declared for 2016 and 2017 of $65,000 and
$45,000, respectively, before adjustment for the above items.
Prepare a revised statement of retained earnings for 2016 and
2017.
(e) Outline the accounting treatment required by ASPE in this
situation and explain how these requirements help investors.
In: Accounting
Click on the following icon
in order to copy its contents into a spreadsheet.)
|
Balance Sheet Accounts of Roman Corporation |
||
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Account |
Balance 12/31/2016 |
Balance 12/31/2017 |
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Accumulated depreciation |
$2,030 |
$2,668 |
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Accounts payable |
$1,797 |
$2,070 |
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Accounts receivable |
$2,479 |
$2,690 |
|
Cash |
$1,307 |
$1,095 |
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Common stock |
$4,990 |
$4,990 |
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Inventory |
$5,807 |
$6,038 |
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Long-term debt |
$7,799 |
$8,192 |
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Plant, property, and equipment |
$8,407 |
$9,195 |
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Retained earnings |
$1,384 |
$1,098 |
Balance sheet. From the following balance sheet accounts in the popup window,
,a. construct a balance sheet for 2016 and 2017.
b. list all the working capital accounts.
c. find the net working capital for the years ending 2016 and 2017.
d. calculate the change in net working capital for the year 2017.
a. construct a balance sheet for 2016 and 2017.
Complete the balance sheet for 2016 below: (Round to the nearest dollar.)
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Roman Corporation |
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Balance Sheet as of December 31, 2016, and December 31, 2017 |
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ASSETS |
2016 |
2017 |
LIABILITIES |
2016 |
2017 |
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Current assets |
Current liabilities |
||||||||
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$ |
$ |
||||||||
|
$ |
Total current liabilities |
$ |
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$ |
$ |
||||||||
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Total current assets |
$ |
Total liabilities |
$ |
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Fixed assets |
OWNERS’ EQUITY |
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$ |
$ |
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$ |
$ |
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$ |
Total owners’ equity |
$ |
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TOTAL LIABILITIES AND |
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TOTAL ASSETS |
$ |
OWNERS’ EQUITY |
$ |
||||||
Choose from any list or enter any number in the input fields and then click Check Answer.
In: Finance
A major overhaul of the Federal Tax structure was enacted at the end of 2017, effective beginning with the 2018 tax year. This assignment consists of calculations to gauge effects on situations as described.
In all cases, for this assignment, assume that the tax being calculated is for a “Married couple filing jointly” who do not itemize deductions, and have no other additions, subtractions, or any tax situations not specifically stated. Complete the table below, finding the difference between the tax due in 2016 and 2018 (all numbers should be rounded to whole dollars). When your table is complete, save this document and either submit it as an attachment via email or turn in a hard copy in class – this assignment is due no later than Monday, April 23rd.
Up to (8) “extra credit” points will be added to your score for Current Event Assignment #2.
|
income |
40,000 |
120,000
|
500,000 |
|
|
total no of additional dependents |
0 |
3 |
2 |
|
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dependents under 17 |
0 |
1 |
2 |
|
|
2016 |
standard deduction amount |
|||
|
2016 |
dollar amount of exemptions |
|||
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2016 |
taxable income |
|||
|
2016 |
gross tax amount |
|||
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2016 |
child tax credit amount |
|||
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2016 |
final amount of tax due |
|||
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2018 |
standard deduction amount |
|||
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2018 |
dollar amount of exemptions |
|||
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2018 |
taxable income |
|||
|
2018 |
gross tax amount |
|||
|
2018 |
child tax credit amount |
|||
|
2018 |
final amount of tax due |
|||
|
difference in amount of tax due, 2018 vs 2016 |
||||
In: Accounting
Comparative Earnings per Share
Lucas Company reports net income of $5,125 for the year ended December 31, 2016, its first year of operations. On January 4, 2016, Lucas issued 9,000 shares of common stock. On August 2, 2016, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end.
During 2017, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2017, and declared and issued a 2-for-1 stock split on November 3, 2017, resulting in 28,000 shares outstanding at year-end.
During 2018, Lucas earned net income of $23,520. The only common stock transaction during 2018 was a 20% stock dividend issued on July 2, 2018.
If required, round your final answers to two decimal places.
Required:
In: Accounting
Comparative Earnings per Share
Lucas Company reports net income of $5,125 for the year ended December 31, 2016, its first year of operations. On January 4, 2016, Lucas issued 9,000 shares of common stock. On August 2, 2016, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end.
During 2017, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2017, and declared and issued a 2-for-1 stock split on November 3, 2017, resulting in 28,000 shares outstanding at year-end.
During 2018, Lucas earned net income of $23,520. The only common stock transaction during 2018 was a 20% stock dividend issued on July 2, 2018.
If required, round your final answers to two decimal places.
Required:
In: Accounting